Exhibit 10-1
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THE PROCTER & GAMBLE 1992 STOCK PLAN
(AS AMENDED MAY 12, 1998)
ARTICLE A -- PURPOSE.
The purpose of The Procter & Gamble 1992 Stock Plan (hereinafter referred
to as the "Plan") is to encourage those employees of The Procter & Gamble
Company (hereinafter referred to as the "Company") and its subsidiaries who are
largely responsible for the long-term success and development of the business to
strengthen the alignment of interests between employees and the Company's
shareholders through the increased ownership of shares of the Company's Common
Stock, and to encourage those employees to remain in the employ of the Company
and its subsidiaries. This will be accomplished through the granting to
employees of options to purchase shares of the Common Stock of the Company,
payment of a portion of the employees' remuneration in shares of the Common
Stock, and the granting to them by the Company and a subsidiary, if appropriate,
of deferred awards related to the increase in the price of the Common Stock of
the Company as provided by the terms and conditions set forth in the Plan.
ARTICLE B -- ADMINISTRATION.
1. The Plan shall be administered by the Compensation Committee
(hereinafter referred to as the "Committee") of the Board of Directors of the
Company (hereinafter referred to as the "Board"), or such other committee as may
be designated by the Board. The Committee shall consist of not less than three
(3) members of the Board who are neither officers nor employees, or members of
the Board who are "disinterested persons" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (hereinafter referred to as the
"1934 Act"), or any successor rule or definition adopted by the Securities and
Exchange Commission, to be appointed by the Board from time to time and to serve
at the discretion of the Board.
2. It shall be the duty of the Committee to administer this Plan in
accordance with its provisions, to report thereon not less than once each year
to the Board and to make such recommendations of amendments or otherwise as it
deem necessary or appropriate. A decision by a majority of the Committee shall
govern all actions of the Committee.
3. Subject to the express provisions of this Plan, the Committee shall have
authority: to grant nonstatutory and incentive stock options; to grant to
recipients stock appreciation rights either freestanding, in tandem with
simultaneously granted stock options, or in parallel with simultaneously granted
stock options; to award a portion of a recipient's remuneration in shares of
Common Stock of the Company subject to such conditions or restrictions, if any,
as the Committee may determine; to determine all the terms and provisions of the
respective stock option, stock appreciation right, and stock award agreements
including setting the dates when each stock option or stock appreciation right
or part thereof may be exercised and determining the conditions and
restrictions, if any, of any shares of Common Stock acquired through the
exercise of any stock option; and to make all other determinations it deems
necessary or advisable for administering this Plan; provided, however, the
Committee shall have the further authority to:
(a) waive the provisions of Article F, paragraph 1(a);
(b) waive the provisions of Article F, paragraph 1(b);
(c) waive the provisions of Article G, paragraph 4(a); and
(d) impose conditions at time of grant in lieu of those set forth in
Article G, paragraphs 4 through 7, for nonstatutory stock options,
stock appreciation rights, and stock award grants which do not increase
or extend the rights of the recipient,
to take into consideration the differences, limitations, and requirements of
foreign laws or conditions including tax regulations, exchange controls or
investment restrictions, possible unenforceability of any part of this Plan, or
other matters deemed appropriate by it.
4. The Committee may establish from time to time such regulations,
provisions, and procedures within the terms of this Plan as, in its opinion, may
be advisable in the administration of this Plan.
5. The Committee may designate the Secretary of the Company or other
employees of the Company to assist the Committee in the administration of this
Plan and may grant authority to such persons to execute documents on behalf of
the Committee.
ARTICLE C -- PARTICIPATION.
The Committee shall select those employees of the Company and its
subsidiaries who, in the opinion of the Committee, have demonstrated a capacity
for contributing in a substantial manner to the success of such companies and
shall determine the number of shares of the Common Stock of the Company to be
transferred under this Plan subject to such conditions or restrictions as the
Committee may determine and the number of shares with respect to which stock
options or stock appreciation rights will be granted. The Committee may consult
with the Chief Executive, but nevertheless the Committee has the full authority
to act, and the Committee's actions shall be final.
ARTICLE D -- LIMITATION ON NUMBER OF SHARES FOR THE PLAN.
1. Unless otherwise authorized by the shareholders, the maximum aggregate
number of shares available for award under this Plan for each calendar year the
Plan is in effect shall be one percent (1%) of the total issued shares of Common
Stock of the Company as of June 30 of the immediately preceding fiscal year.
2. Any of the authorized shares may be used in respect of any of the types
of awards described in this Plan, except that no more than twenty-five percent
(25%) of the authorized shares in any calendar year may be issued as restricted
or unrestricted stock and no more than 50,000,000 of the authorized shares
during the term of the Plan may be issued as incentive stock options.
3. Any authorized shares not used in a calendar year shall be available for
awards under this Plan in succeeding calendar years.
ARTICLE E -- SHARES SUBJECT TO USE UNDER THE PLAN.
1. The shares to be delivered by the Company upon exercise of stock options
or stock appreciation rights shall be either authorized but unissued shares or
treasury shares, as determined by the Board. In the case of redemption of stock
appreciation rights by one of the Company's subsidiaries, such shares shall be
shares acquired by that subsidiary. Notwithstanding any terms or conditions
contained herein, the shares to be delivered by the Company upon exercise of
stock options or stock appreciation rights by a participant located in Italy
shall be authorized but unissued shares.
2. For purposes of this Plan, restricted or unrestricted stock awarded
under the terms of this Plan shall be authorized but unissued shares, treasury
shares, or shares acquired for purposes of the Plan by the Company or a
subsidiary, as determined by the Board.
ARTICLE F -- STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
1. In addition to such other conditions as may be established by the
Committee, in consideration of the granting of stock options or stock
appreciation rights under the terms of this Plan, the recipient agrees as
follows:
(a) The right to exercise any stock option or stock appreciation right
shall be conditional upon certification by the recipient at time of
exercise that the recipient intends to remain in the employ of the
Company or one of its subsidiaries (except in cases of retirement,
disability or Special Separation as defined in section 6 of Article G)
for at least one (1) year following the date of the exercise of the
stock option or stock appreciation right, and,
(b) In order to better protect the goodwill of the Company and its
subsidiaries and to prevent the disclosure of the Company's or it
subsidiaries' trade secrets and confidential information and thereby
help insure the long-term success of the business, the recipient,
without prior written consent of the Company, will not engage in any
activity or provide any services, whether as a director, manager,
supervisor, employee, adviser, consultant or otherwise, for a period of
three (3) years following the date of the recipient's termination of
employment with the Company, in connection with the manufacture,
development, advertising, promotion, or sale of any product which is
the same as or similar to or competitive with any products of the
Company or its subsidiaries (including both existing products as well
as products known to the recipient, as a consequence of the recipient's
employment with the Company or one of its subsidiaries, to be in
development):
(1) with respect to which the recipient's work has been directly
concerned at any time during the two (2) years preceding
termination of employment with the Company or one of its
subsidiaries or
(2) with respect to which during that period of time the recipient, as
a consequence of the recipient's job performance and duties,
acquired knowledge of trade secrets or other confidential
information of the Company or its subsidiaries.
For purposes of this section, it shall be conclusively presumed that
recipients have knowledge of information they were directly exposed to
through actual receipt or review of memos or documents containing such
information, or through actual attendance at meetings at which such
information was discussed or disclosed.
(c) The provisions of this Article are not in lieu of, but are in
addition to the continuing obligation of the recipient (which recipient
hereby acknowledges) to not use or disclose the Company's or its
subsidiaries' trade secrets and confidential information known to the
recipient until any particular trade secret or confidential information
become generally known (through no fault of the recipient), whereupon
the restriction on use and disclosure shall cease as to that item.
Information regarding products in development, in test marketing or
being marketed or promoted in a discrete geographic region, which
information the Company or one of its subsidiaries is considering for
broader use, shall not be deemed generally known until such broader use
is actually commercially implemented. As used in this Article,
"generally known" means known throughout the domestic U. S. industry
or, in the case of recipients who have job responsibilities outside of
the United States, the appropriate foreign country or countries'
industry.
(d) By acceptance of any offered stock option or stock appreciation
rights granted under the terms of this Plan, the recipient acknowledges
that if the recipient were, without authority, to use or disclose the
Company's or any of its subsidiaries' trade secrets or confidential
information or threaten to do so, the Company or one of its
subsidiaries would be entitled to injunctive and other appropriate
relief to prevent the recipient from doing so. The recipient
acknowledges that the harm caused to the Company by the breach or
anticipated breach of this Article is by its nature irreparable
because, among other things, it is not readily susceptible of proof as
to the monetary harm that would ensue. The recipient consents that any
interim or final equitable relief entered by a court of competent
jurisdiction shall, at the request of the Company or one of its
subsidiaries, be entered on consent and enforced by any court having
jurisdiction over the recipient, without prejudice to any rights either
party may have to appeal from the proceedings which resulted in any
grant of such relief.
(e) If any of the provisions contained in this Article shall for any
reason, whether by application of existing law or law which may develop
after the recipient's acceptance of an offer of the granting of stock
appreciation rights or stock options, be determined by a court of
competent jurisdiction to be overly broad as to scope of activity,
duration, or territory, the recipient agrees to join the Company or any
of its subsidiaries in requesting such court to construe such provision
by limiting or reducing it so as to be enforceable to the extent
compatible with then applicable law. If any one or more of the terms,
provisions, covenants, or restrictions of this Article shall be
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants,
and restrictions of this Article shall remain in full force and effect
and shall in no way be affected, impaired, or invalidated.
2. The fact that an employee has been granted a stock option or a stock
appreciation right under this Plan shall not limit the right of the employer to
terminate the recipient's employment at any time. The Committee is authorized to
suspend or terminate any outstanding stock option or stock appreciation right
prior to or after termination of employment if the Committee determines the
recipient has acted significantly contrary to the best interests of the Company.
3. More than one stock option or stock appreciation right may be granted to
any employee under this Plan but the maximum number of shares with respect to
which stock options or stock appreciation rights may be granted to any employee
in any calendar year shall not exceed five percent (5%) of the number of shares
which can be issued or transferred annually hereunder.
4. The aggregate fair market value (determined at the time when the
incentive stock option is exercisable for the first time by an employee during
any calendar year) of the shares for which any employee may be granted incentive
stock options under this Plan and all other stock option plans of the Company
and its subsidiaries in any calendar year shall not exceed $100,000 (or such
other amount as reflected in the limits imposed by Section 422(d) of the
Internal Revenue Code of 1986, as it may be amended from time to time).
5. If the Committee grants incentive stock options, all such stock options
shall contain such provisions as permit them to qualify as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as may be amended from time to time.
6. With respect to stock options granted in tandem with or parallel to
stock appreciation rights, the exercise of either such stock options or such
stock appreciation rights will result in the simultaneous cancellation of the
same number of tandem or parallel stock appreciation rights or stock options, as
the case may be.
7. The exercise price for all stock options and stock appreciation rights
shall be established by the Committee at the time of their grant and shall be
not less than one hundred percent (100%) of the fair market value of the Common
Stock of the Company on the date of grant.
ARTICLE G -- EXERCISE OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
1. All stock options and stock appreciation rights granted hereunder shall
have a maximum life of no more than ten (10) years from the date of grant.
2. No stock options or stock appreciation rights shall be exercisable
within one (1) year from their date of grant, except in the case of the death of
the recipient.
3. During the lifetime of the recipient, stock options and stock
appreciation rights may be exercised only by the recipient personally, or, in
the event of the legal incompetence of the recipient, by the recipient's duly
appointed legal guardian.
4. In case a recipient of stock options or stock appreciation rights ceases
to be an employee of the Company or any of its subsidiaries while holding an
unexercised stock option or stock appreciation right:
(a) Any unexercisable portions thereof are then void, except in the case
of: (1) death of the recipient; (2) any Special Separation (as defined
in section 6 of this Article G) that occurs more than six months from
the date the options were granted; or (3) any option as to which the
Committee has waived, at the time of grant, the provisions of this
Article G, paragraph 4(a) pursuant to the authority granted by Article
B, paragraph 3.
(b) Any exercisable portions thereof are then void, except in the case
of death, retirement in accordance with the provisions of any
appropriate profit sharing or retirement plan of the Company or any of
its subsidiaries, or Special Separation (as defined in section 6 of
this Article G) of the recipient.
5. In the case of the death of a recipient of stock options or stock
appreciation rights while an employee of the Company or any of its subsidiaries,
the persons to whom the stock options or stock appreciation rights have been
transferred by will or the laws of descent and distribution shall have the
privilege of exercising remaining stock options, stock appreciation rights or
parts thereof, whether or not exercisable on the date of death of such employee,
at any time prior to the expiration date of the stock options or stock
appreciation rights.
6. Termination of employment under the permanent disability provision of
any appropriate profit sharing or retirement plan of the Company or any of its
subsidiaries shall be deemed the same as retirement. Special Separation means
any termination of employment, except a termination for cause, if it is
certified in writing by a member of the Executive Committee of the Company, with
the concurrence of the appropriate Vice President-Human Resources, that the
termination should be treated as a Special Separation under this Plan. The death
of a recipient of stock options or stock appreciation rights subsequent to
retirement or Special Separation shall not render exercisable stock options or
stock appreciation rights which were unexercisable at the time of the retirement
or Special Separation. The persons to whom the exercisable stock options or
stock appreciation rights have been transferred by will or the laws of descent
and distribution shall have the privilege of exercising such remaining stock
options, stock appreciation rights or parts thereof, at any time prior to the
expiration date of the stock options or stock appreciation rights.
7. Stock options and stock appreciation rights are not transferable other
than by will or by the laws of descent and distribution. For the purpose of
exercising stock options or stock appreciation rights after the death of the
recipient, the duly appointed executors and administrators of the estate of the
deceased recipient shall have the same rights with respect to the stock options
and stock appreciation rights as legatees or distributees would have after
distribution to them from the recipient's estate.
8. Upon the exercise of stock appreciation rights, the recipient shall be
entitled to receive a redemption differential for each such stock appreciation
right which shall be the difference between the then fair market value of one
share of the Common Stock of the Company and the exercise price of one stock
appreciation right then being exercised. In the case of the redemption of stock
appreciation rights by a subsidiary of the Company not located in the United
States, the redemption differential shall be calculated in United States dollars
and converted to the appropriate local currency on the exercise date. As
determined by the Committee, the redemption differential may be paid in cash,
Common Stock of the Company to be valued at its fair market value on the date of
exercise, any other mode of payment deemed appropriate by the Committee or any
combination thereof. The number of shares with respect to which stock
appreciation rights are being exercised shall not be available for granting
future stock options or stock appreciation rights under this Plan.
9. The Committee may, in its sole discretion, permit a stock option which
is being exercised either (a) by an optionee whose retirement is imminent or who
has retired or (b) after the death of the optionee, to be surrendered, in lieu
of exercise, for an amount equal to the difference between the stock option
exercise price and the fair market value of shares of the Common Stock of the
Company on the day the stock option is surrendered, payment to be made in shares
of the Company's Common Stock which are subject to this Plan valued at their
fair market value on such date, cash, or a combination thereof, in such
proportion and upon such terms and conditions as shall be determined by the
Committee. The difference between the number of shares subject to stock options
so surrendered and the number of shares, if any, issued upon such surrender
shall represent shares which shall not be available for granting future stock
options under this Plan.
10. Time spent on leave of absence shall be considered as employment for
the purposes of this Plan. Leave of absence means any period of time away from
work granted to any employee by his or her employer because of illness, injury,
or other reasons satisfactory to the employer.
11. The Company reserves the right from time to time to suspend the
exercise of any stock option or stock appreciation right where such suspension
is deemed by it necessary or appropriate for corporate purposes. No such
suspension shall extend the life of the stock option or stock appreciation right
beyond its expiration date, and in no event will there be a suspension in the
five (5) calendar days immediately preceding the expiration date.
ARTICLE H -- PAYMENT FOR STOCK OPTIONS.
Upon the exercise of a stock option, payment in full of the exercise price
shall be made by the optionee. As determined by the Committee, the stock option
exercise price may be paid for by the optionee either in cash, shares of the
Common Stock of the Company to be valued at their fair market value on the date
of exercise, a combination thereof, or such other method as determined by the
Committee.
ARTICLE I -- TRANSFER OF SHARES.
1. The Committee may transfer Common Stock of the Company under the Plan
subject to such conditions or restrictions, if any, as the Committee may
determine. The conditions and restrictions may vary from time to time and with
respect to particular employees or group of employees and may be set forth in
agreements between the Company and the employee or in the awards of stock to
them, all as the Committee determines. It is contemplated that the conditions
and restrictions established by the Committee will be consistent with the
objectives of this Plan and may be of the following types. In giving these
examples, it is not intended to restrict the Committee's authority to impose
other restrictions or conditions, or to waive restrictions or conditions under
circumstances deemed by the Committee to be appropriate and not contrary to the
best interests of the Company.
(a) Restrictions
The employee will not be able to sell, pledge, or dispose of the shares
during a specified period except in accordance with the agreement or
award. Such restrictions will lapse either after a period of, for
example, five years, or in fifteen or fewer annual installments
following retirement or termination of employment, as the Committee
from time to time may determine. However, upon the transfer of shares
subject to restrictions, an employee will have all incidents of
ownership in the shares, including the right to dividends (unless
otherwise restricted by the Committee), to vote the shares, and to make
gifts of them to family members (still subject to the restrictions).
(b) Lapse of Restrictions
In order to have the restrictions lapse, an employee may be required to
continue in the employ of the Company or a subsidiary for a prescribed
period of time. Exemption from this requirement may be prescribed in
the case of death, disability, or retirement, or as otherwise
prescribed by the Committee. In addition, an employee may be required,
following termination of employment other than by retirement or
disability, to render limited consulting and advisory services and to
refrain from conduct deemed contrary to the best interests of the
Company.
ARTICLE J -- ADJUSTMENTS.
The amount of shares authorized to be issued annually under this Plan will
be subject to appropriate adjustments in their numbers in the event of future
stock splits, stock dividends, or other changes in capitalization of the Company
occurring after the date of approval of this Plan by the Company's shareholders
to prevent the dilution or enlargement of rights under this Plan; following any
such change, the term "Common Stock" shall be deemed to refer to such class of
shares or other securities as may be applicable. The number of shares and
exercise prices covered by outstanding stock options and stock appreciation
rights shall be adjusted to give effect to any such stock splits, stock
dividends, or other changes in the capitalization.
ARTICLE K -- Additional Provisions.
1. The Board may, at any time, repeal this Plan or may amend it from time
to time except that no such amendment may amend this paragraph, increase the
annual aggregate number of shares subject to this Plan, reduce the price at
which stock options or stock appreciation rights may be granted, exercised, or
surrendered, alter the class of employees eligible to receive stock options, or
increase the percentage of shares authorized to be transferred as restricted or
unrestricted stock. The recipient of awards under this Plan and the Company
shall be bound by any such amendments as of their effective dates, but if any
outstanding stock options or stock appreciation rights are affected, notice
thereof shall be given to the holders of such stock options and stock
appreciation rights and such amendments shall not be applicable to such holder
without his or her written consent. If this Plan is repealed in its entirety,
all theretofore granted unexercised stock options or stock appreciation rights
shall continue to be exercisable in accordance with their terms and shares
subject to conditions or restrictions transferred pursuant to this Plan shall
continue to be subject to such conditions or restrictions.
2. In the case of an employee of a subsidiary company, performance under
this Plan, including the transfer of shares of the Company, may be by the
subsidiary. Nothing in this Plan shall affect the right of the Company or any
subsidiary to terminate the employment of any employee with or without cause.
None of the participants, either individually or as a group, and no beneficiary
or other person claiming under or through any participant, shall have any right,
title, or interest in any shares of the Company purchased or reserved for the
purpose of this Plan except as to such shares, if any, as shall have been
granted or transferred to him or her. Nothing in this Plan shall preclude the
issuance or transfer of shares of the Company to employees under any other plan
or arrangement now or hereafter in effect.
3. "Subsidiary" means any company in which fifty percent (50%) or more of
the total combined voting power of all classes of stock is owned, directly or
indirectly, by the Company. In addition, the Board may designate for
participation in this Plan as a "subsidiary," except for the granting of
incentive stock options, those additional companies affiliated with the Company
in which the Company's direct or indirect stock ownership is less than fifty
percent (50%) of the total combined voting power of all classes of such
company's stock.
ARTICLE L -- CONSENT.
Every recipient of a stock option, stock appreciation right, or transfer of
shares pursuant to this Plan shall be bound by the terms and provisions of this
Plan and of the stock option, stock appreciation right, or transfer of shares
agreement referable thereto, and the acceptance of any stock option, stock
appreciation right, or transfer of shares pursuant to this Plan shall constitute
a binding agreement between the recipient and the Company and its subsidiaries
and any successors in interest to any of them. This Plan shall be governed by
and construed in accordance with the laws of the State of Ohio, United States of
America.
ARTICLE M -- DURATION OF PLAN.
This Plan will terminate on July 14, 2002 unless a different termination
date is fixed by the shareholders or by action of the Board of Directors, but no
such termination shall affect the prior rights under this Plan of the Company
(or any subsidiary) or of anyone to whom stock options or stock appreciation
rights were granted prior thereto or to whom shares have been transferred prior
to such termination.
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THE PROCTER & GAMBLE 1992 STOCK PLAN
(AS AMENDED MAY 12, 1998)
ARTICLE A -- PURPOSE.
The purpose of The Procter & Gamble 1992 Stock Plan (hereinafter referred
to as the "Plan") is to encourage those employees of The Procter & Gamble
Company (hereinafter referred to as the "Company") and its subsidiaries who are
largely responsible for the long-term success and development of the business to
strengthen the alignment of interests between employees and the Company's
shareholders through the increased ownership of shares of the Company's Common
Stock, and to encourage those employees to remain in the employ of the Company
and its subsidiaries. This will be accomplished through the granting to
employees of options to purchase shares of the Common Stock of the Company,
payment of a portion of the employees' remuneration in shares of the Common
Stock, and the granting to them by the Company and a subsidiary, if appropriate,
of deferred awards related to the increase in the price of the Common Stock of
the Company as provided by the terms and conditions set forth in the Plan.
ARTICLE B -- ADMINISTRATION.
1. The Plan shall be administered by the Compensation Committee
(hereinafter referred to as the "Committee") of the Board of Directors of the
Company (hereinafter referred to as the "Board"), or such other committee as may
be designated by the Board. The Committee shall consist of not less than three
(3) members of the Board who are neither officers nor employees, or members of
the Board who are "disinterested persons" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (hereinafter referred to as the
"1934 Act"), or any successor rule or definition adopted by the Securities and
Exchange Commission, to be appointed by the Board from time to time and to serve
at the discretion of the Board.
2. It shall be the duty of the Committee to administer this Plan in
accordance with its provisions, to report thereon not less than once each year
to the Board and to make such recommendations of amendments or otherwise as it
deem necessary or appropriate. A decision by a majority of the Committee shall
govern all actions of the Committee.
3. Subject to the express provisions of this Plan, the Committee shall have
authority: to grant nonstatutory and incentive stock options; to grant to
recipients stock appreciation rights either freestanding, in tandem with
simultaneously granted stock options, or in parallel with simultaneously granted
stock options; to award a portion of a recipient's remuneration in shares of
Common Stock of the Company subject to such conditions or restrictions, if any,
as the Committee may determine; to determine all the terms and provisions of the
respective stock option, stock appreciation right, and stock award agreements
including setting the dates when each stock option or stock appreciation right
or part thereof may be exercised and determining the conditions and
restrictions, if any, of any shares of Common Stock acquired through the
exercise of any stock option; and to make all other determinations it deems
necessary or advisable for administering this Plan; provided, however, the
Committee shall have the further authority to:
(a) waive the provisions of Article F, paragraph 1(a);
(b) waive the provisions of Article F, paragraph 1(b);
(c) waive the provisions of Article G, paragraph 4(a); and
(d) impose conditions at time of grant in lieu of those set forth in
Article G, paragraphs 4 through 7, for nonstatutory stock options,
stock appreciation rights, and stock award grants which do not increase
or extend the rights of the recipient,
to take into consideration the differences, limitations, and requirements of
foreign laws or conditions including tax regulations, exchange controls or
investment restrictions, possible unenforceability of any part of this Plan, or
other matters deemed appropriate by it.
4. The Committee may establish from time to time such regulations,
provisions, and procedures within the terms of this Plan as, in its opinion, may
be advisable in the administration of this Plan.
5. The Committee may designate the Secretary of the Company or other
employees of the Company to assist the Committee in the administration of this
Plan and may grant authority to such persons to execute documents on behalf of
the Committee.
ARTICLE C -- PARTICIPATION.
The Committee shall select those employees of the Company and its
subsidiaries who, in the opinion of the Committee, have demonstrated a capacity
for contributing in a substantial manner to the success of such companies and
shall determine the number of shares of the Common Stock of the Company to be
transferred under this Plan subject to such conditions or restrictions as the
Committee may determine and the number of shares with respect to which stock
options or stock appreciation rights will be granted. The Committee may consult
with the Chief Executive, but nevertheless the Committee has the full authority
to act, and the Committee's actions shall be final.
ARTICLE D -- LIMITATION ON NUMBER OF SHARES FOR THE PLAN.
1. Unless otherwise authorized by the shareholders, the maximum aggregate
number of shares available for award under this Plan for each calendar year the
Plan is in effect shall be one percent (1%) of the total issued shares of Common
Stock of the Company as of June 30 of the immediately preceding fiscal year.
2. Any of the authorized shares may be used in respect of any of the types
of awards described in this Plan, except that no more than twenty-five percent
(25%) of the authorized shares in any calendar year may be issued as restricted
or unrestricted stock and no more than 50,000,000 of the authorized shares
during the term of the Plan may be issued as incentive stock options.
3. Any authorized shares not used in a calendar year shall be available for
awards under this Plan in succeeding calendar years.
ARTICLE E -- SHARES SUBJECT TO USE UNDER THE PLAN.
1. The shares to be delivered by the Company upon exercise of stock options
or stock appreciation rights shall be either authorized but unissued shares or
treasury shares, as determined by the Board. In the case of redemption of stock
appreciation rights by one of the Company's subsidiaries, such shares shall be
shares acquired by that subsidiary. Notwithstanding any terms or conditions
contained herein, the shares to be delivered by the Company upon exercise of
stock options or stock appreciation rights by a participant located in Italy
shall be authorized but unissued shares.
2. For purposes of this Plan, restricted or unrestricted stock awarded
under the terms of this Plan shall be authorized but unissued shares, treasury
shares, or shares acquired for purposes of the Plan by the Company or a
subsidiary, as determined by the Board.
ARTICLE F -- STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
1. In addition to such other conditions as may be established by the
Committee, in consideration of the granting of stock options or stock
appreciation rights under the terms of this Plan, the recipient agrees as
follows:
(a) The right to exercise any stock option or stock appreciation right
shall be conditional upon certification by the recipient at time of
exercise that the recipient intends to remain in the employ of the
Company or one of its subsidiaries (except in cases of retirement,
disability or Special Separation as defined in section 6 of Article G)
for at least one (1) year following the date of the exercise of the
stock option or stock appreciation right, and,
(b) In order to better protect the goodwill of the Company and its
subsidiaries and to prevent the disclosure of the Company's or it
subsidiaries' trade secrets and confidential information and thereby
help insure the long-term success of the business, the recipient,
without prior written consent of the Company, will not engage in any
activity or provide any services, whether as a director, manager,
supervisor, employee, adviser, consultant or otherwise, for a period of
three (3) years following the date of the recipient's termination of
employment with the Company, in connection with the manufacture,
development, advertising, promotion, or sale of any product which is
the same as or similar to or competitive with any products of the
Company or its subsidiaries (including both existing products as well
as products known to the recipient, as a consequence of the recipient's
employment with the Company or one of its subsidiaries, to be in
development):
(1) with respect to which the recipient's work has been directly
concerned at any time during the two (2) years preceding
termination of employment with the Company or one of its
subsidiaries or
(2) with respect to which during that period of time the recipient, as
a consequence of the recipient's job performance and duties,
acquired knowledge of trade secrets or other confidential
information of the Company or its subsidiaries.
For purposes of this section, it shall be conclusively presumed that
recipients have knowledge of information they were directly exposed to
through actual receipt or review of memos or documents containing such
information, or through actual attendance at meetings at which such
information was discussed or disclosed.
(c) The provisions of this Article are not in lieu of, but are in
addition to the continuing obligation of the recipient (which recipient
hereby acknowledges) to not use or disclose the Company's or its
subsidiaries' trade secrets and confidential information known to the
recipient until any particular trade secret or confidential information
become generally known (through no fault of the recipient), whereupon
the restriction on use and disclosure shall cease as to that item.
Information regarding products in development, in test marketing or
being marketed or promoted in a discrete geographic region, which
information the Company or one of its subsidiaries is considering for
broader use, shall not be deemed generally known until such broader use
is actually commercially implemented. As used in this Article,
"generally known" means known throughout the domestic U. S. industry
or, in the case of recipients who have job responsibilities outside of
the United States, the appropriate foreign country or countries'
industry.
(d) By acceptance of any offered stock option or stock appreciation
rights granted under the terms of this Plan, the recipient acknowledges
that if the recipient were, without authority, to use or disclose the
Company's or any of its subsidiaries' trade secrets or confidential
information or threaten to do so, the Company or one of its
subsidiaries would be entitled to injunctive and other appropriate
relief to prevent the recipient from doing so. The recipient
acknowledges that the harm caused to the Company by the breach or
anticipated breach of this Article is by its nature irreparable
because, among other things, it is not readily susceptible of proof as
to the monetary harm that would ensue. The recipient consents that any
interim or final equitable relief entered by a court of competent
jurisdiction shall, at the request of the Company or one of its
subsidiaries, be entered on consent and enforced by any court having
jurisdiction over the recipient, without prejudice to any rights either
party may have to appeal from the proceedings which resulted in any
grant of such relief.
(e) If any of the provisions contained in this Article shall for any
reason, whether by application of existing law or law which may develop
after the recipient's acceptance of an offer of the granting of stock
appreciation rights or stock options, be determined by a court of
competent jurisdiction to be overly broad as to scope of activity,
duration, or territory, the recipient agrees to join the Company or any
of its subsidiaries in requesting such court to construe such provision
by limiting or reducing it so as to be enforceable to the extent
compatible with then applicable law. If any one or more of the terms,
provisions, covenants, or restrictions of this Article shall be
determined by a court of competent jurisdiction to be invalid, void or
unenforceable, then the remainder of the terms, provisions, covenants,
and restrictions of this Article shall remain in full force and effect
and shall in no way be affected, impaired, or invalidated.
2. The fact that an employee has been granted a stock option or a stock
appreciation right under this Plan shall not limit the right of the employer to
terminate the recipient's employment at any time. The Committee is authorized to
suspend or terminate any outstanding stock option or stock appreciation right
prior to or after termination of employment if the Committee determines the
recipient has acted significantly contrary to the best interests of the Company.
3. More than one stock option or stock appreciation right may be granted to
any employee under this Plan but the maximum number of shares with respect to
which stock options or stock appreciation rights may be granted to any employee
in any calendar year shall not exceed five percent (5%) of the number of shares
which can be issued or transferred annually hereunder.
4. The aggregate fair market value (determined at the time when the
incentive stock option is exercisable for the first time by an employee during
any calendar year) of the shares for which any employee may be granted incentive
stock options under this Plan and all other stock option plans of the Company
and its subsidiaries in any calendar year shall not exceed $100,000 (or such
other amount as reflected in the limits imposed by Section 422(d) of the
Internal Revenue Code of 1986, as it may be amended from time to time).
5. If the Committee grants incentive stock options, all such stock options
shall contain such provisions as permit them to qualify as "incentive stock
options" within the meaning of Section 422 of the Internal Revenue Code of 1986,
as may be amended from time to time.
6. With respect to stock options granted in tandem with or parallel to
stock appreciation rights, the exercise of either such stock options or such
stock appreciation rights will result in the simultaneous cancellation of the
same number of tandem or parallel stock appreciation rights or stock options, as
the case may be.
7. The exercise price for all stock options and stock appreciation rights
shall be established by the Committee at the time of their grant and shall be
not less than one hundred percent (100%) of the fair market value of the Common
Stock of the Company on the date of grant.
ARTICLE G -- EXERCISE OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
1. All stock options and stock appreciation rights granted hereunder shall
have a maximum life of no more than ten (10) years from the date of grant.
2. No stock options or stock appreciation rights shall be exercisable
within one (1) year from their date of grant, except in the case of the death of
the recipient.
3. During the lifetime of the recipient, stock options and stock
appreciation rights may be exercised only by the recipient personally, or, in
the event of the legal incompetence of the recipient, by the recipient's duly
appointed legal guardian.
4. In case a recipient of stock options or stock appreciation rights ceases
to be an employee of the Company or any of its subsidiaries while holding an
unexercised stock option or stock appreciation right:
(a) Any unexercisable portions thereof are then void, except in the case
of: (1) death of the recipient; (2) any Special Separation (as defined
in section 6 of this Article G) that occurs more than six months from
the date the options were granted; or (3) any option as to which the
Committee has waived, at the time of grant, the provisions of this
Article G, paragraph 4(a) pursuant to the authority granted by Article
B, paragraph 3.
(b) Any exercisable portions thereof are then void, except in the case
of death, retirement in accordance with the provisions of any
appropriate profit sharing or retirement plan of the Company or any of
its subsidiaries, or Special Separation (as defined in section 6 of
this Article G) of the recipient.
5. In the case of the death of a recipient of stock options or stock
appreciation rights while an employee of the Company or any of its subsidiaries,
the persons to whom the stock options or stock appreciation rights have been
transferred by will or the laws of descent and distribution shall have the
privilege of exercising remaining stock options, stock appreciation rights or
parts thereof, whether or not exercisable on the date of death of such employee,
at any time prior to the expiration date of the stock options or stock
appreciation rights.
6. Termination of employment under the permanent disability provision of
any appropriate profit sharing or retirement plan of the Company or any of its
subsidiaries shall be deemed the same as retirement. Special Separation means
any termination of employment, except a termination for cause, if it is
certified in writing by a member of the Executive Committee of the Company, with
the concurrence of the appropriate Vice President-Human Resources, that the
termination should be treated as a Special Separation under this Plan. The death
of a recipient of stock options or stock appreciation rights subsequent to
retirement or Special Separation shall not render exercisable stock options or
stock appreciation rights which were unexercisable at the time of the retirement
or Special Separation. The persons to whom the exercisable stock options or
stock appreciation rights have been transferred by will or the laws of descent
and distribution shall have the privilege of exercising such remaining stock
options, stock appreciation rights or parts thereof, at any time prior to the
expiration date of the stock options or stock appreciation rights.
7. Stock options and stock appreciation rights are not transferable other
than by will or by the laws of descent and distribution. For the purpose of
exercising stock options or stock appreciation rights after the death of the
recipient, the duly appointed executors and administrators of the estate of the
deceased recipient shall have the same rights with respect to the stock options
and stock appreciation rights as legatees or distributees would have after
distribution to them from the recipient's estate.
8. Upon the exercise of stock appreciation rights, the recipient shall be
entitled to receive a redemption differential for each such stock appreciation
right which shall be the difference between the then fair market value of one
share of the Common Stock of the Company and the exercise price of one stock
appreciation right then being exercised. In the case of the redemption of stock
appreciation rights by a subsidiary of the Company not located in the United
States, the redemption differential shall be calculated in United States dollars
and converted to the appropriate local currency on the exercise date. As
determined by the Committee, the redemption differential may be paid in cash,
Common Stock of the Company to be valued at its fair market value on the date of
exercise, any other mode of payment deemed appropriate by the Committee or any
combination thereof. The number of shares with respect to which stock
appreciation rights are being exercised shall not be available for granting
future stock options or stock appreciation rights under this Plan.
9. The Committee may, in its sole discretion, permit a stock option which
is being exercised either (a) by an optionee whose retirement is imminent or who
has retired or (b) after the death of the optionee, to be surrendered, in lieu
of exercise, for an amount equal to the difference between the stock option
exercise price and the fair market value of shares of the Common Stock of the
Company on the day the stock option is surrendered, payment to be made in shares
of the Company's Common Stock which are subject to this Plan valued at their
fair market value on such date, cash, or a combination thereof, in such
proportion and upon such terms and conditions as shall be determined by the
Committee. The difference between the number of shares subject to stock options
so surrendered and the number of shares, if any, issued upon such surrender
shall represent shares which shall not be available for granting future stock
options under this Plan.
10. Time spent on leave of absence shall be considered as employment for
the purposes of this Plan. Leave of absence means any period of time away from
work granted to any employee by his or her employer because of illness, injury,
or other reasons satisfactory to the employer.
11. The Company reserves the right from time to time to suspend the
exercise of any stock option or stock appreciation right where such suspension
is deemed by it necessary or appropriate for corporate purposes. No such
suspension shall extend the life of the stock option or stock appreciation right
beyond its expiration date, and in no event will there be a suspension in the
five (5) calendar days immediately preceding the expiration date.
ARTICLE H -- PAYMENT FOR STOCK OPTIONS.
Upon the exercise of a stock option, payment in full of the exercise price
shall be made by the optionee. As determined by the Committee, the stock option
exercise price may be paid for by the optionee either in cash, shares of the
Common Stock of the Company to be valued at their fair market value on the date
of exercise, a combination thereof, or such other method as determined by the
Committee.
ARTICLE I -- TRANSFER OF SHARES.
1. The Committee may transfer Common Stock of the Company under the Plan
subject to such conditions or restrictions, if any, as the Committee may
determine. The conditions and restrictions may vary from time to time and with
respect to particular employees or group of employees and may be set forth in
agreements between the Company and the employee or in the awards of stock to
them, all as the Committee determines. It is contemplated that the conditions
and restrictions established by the Committee will be consistent with the
objectives of this Plan and may be of the following types. In giving these
examples, it is not intended to restrict the Committee's authority to impose
other restrictions or conditions, or to waive restrictions or conditions under
circumstances deemed by the Committee to be appropriate and not contrary to the
best interests of the Company.
(a) Restrictions
The employee will not be able to sell, pledge, or dispose of the shares
during a specified period except in accordance with the agreement or
award. Such restrictions will lapse either after a period of, for
example, five years, or in fifteen or fewer annual installments
following retirement or termination of employment, as the Committee
from time to time may determine. However, upon the transfer of shares
subject to restrictions, an employee will have all incidents of
ownership in the shares, including the right to dividends (unless
otherwise restricted by the Committee), to vote the shares, and to make
gifts of them to family members (still subject to the restrictions).
(b) Lapse of Restrictions
In order to have the restrictions lapse, an employee may be required to
continue in the employ of the Company or a subsidiary for a prescribed
period of time. Exemption from this requirement may be prescribed in
the case of death, disability, or retirement, or as otherwise
prescribed by the Committee. In addition, an employee may be required,
following termination of employment other than by retirement or
disability, to render limited consulting and advisory services and to
refrain from conduct deemed contrary to the best interests of the
Company.
ARTICLE J -- ADJUSTMENTS.
The amount of shares authorized to be issued annually under this Plan will
be subject to appropriate adjustments in their numbers in the event of future
stock splits, stock dividends, or other changes in capitalization of the Company
occurring after the date of approval of this Plan by the Company's shareholders
to prevent the dilution or enlargement of rights under this Plan; following any
such change, the term "Common Stock" shall be deemed to refer to such class of
shares or other securities as may be applicable. The number of shares and
exercise prices covered by outstanding stock options and stock appreciation
rights shall be adjusted to give effect to any such stock splits, stock
dividends, or other changes in the capitalization.
ARTICLE K -- Additional Provisions.
1. The Board may, at any time, repeal this Plan or may amend it from time
to time except that no such amendment may amend this paragraph, increase the
annual aggregate number of shares subject to this Plan, reduce the price at
which stock options or stock appreciation rights may be granted, exercised, or
surrendered, alter the class of employees eligible to receive stock options, or
increase the percentage of shares authorized to be transferred as restricted or
unrestricted stock. The recipient of awards under this Plan and the Company
shall be bound by any such amendments as of their effective dates, but if any
outstanding stock options or stock appreciation rights are affected, notice
thereof shall be given to the holders of such stock options and stock
appreciation rights and such amendments shall not be applicable to such holder
without his or her written consent. If this Plan is repealed in its entirety,
all theretofore granted unexercised stock options or stock appreciation rights
shall continue to be exercisable in accordance with their terms and shares
subject to conditions or restrictions transferred pursuant to this Plan shall
continue to be subject to such conditions or restrictions.
2. In the case of an employee of a subsidiary company, performance under
this Plan, including the transfer of shares of the Company, may be by the
subsidiary. Nothing in this Plan shall affect the right of the Company or any
subsidiary to terminate the employment of any employee with or without cause.
None of the participants, either individually or as a group, and no beneficiary
or other person claiming under or through any participant, shall have any right,
title, or interest in any shares of the Company purchased or reserved for the
purpose of this Plan except as to such shares, if any, as shall have been
granted or transferred to him or her. Nothing in this Plan shall preclude the
issuance or transfer of shares of the Company to employees under any other plan
or arrangement now or hereafter in effect.
3. "Subsidiary" means any company in which fifty percent (50%) or more of
the total combined voting power of all classes of stock is owned, directly or
indirectly, by the Company. In addition, the Board may designate for
participation in this Plan as a "subsidiary," except for the granting of
incentive stock options, those additional companies affiliated with the Company
in which the Company's direct or indirect stock ownership is less than fifty
percent (50%) of the total combined voting power of all classes of such
company's stock.
ARTICLE L -- CONSENT.
Every recipient of a stock option, stock appreciation right, or transfer of
shares pursuant to this Plan shall be bound by the terms and provisions of this
Plan and of the stock option, stock appreciation right, or transfer of shares
agreement referable thereto, and the acceptance of any stock option, stock
appreciation right, or transfer of shares pursuant to this Plan shall constitute
a binding agreement between the recipient and the Company and its subsidiaries
and any successors in interest to any of them. This Plan shall be governed by
and construed in accordance with the laws of the State of Ohio, United States of
America.
ARTICLE M -- DURATION OF PLAN.
This Plan will terminate on July 14, 2002 unless a different termination
date is fixed by the shareholders or by action of the Board of Directors, but no
such termination shall affect the prior rights under this Plan of the Company
(or any subsidiary) or of anyone to whom stock options or stock appreciation
rights were granted prior thereto or to whom shares have been transferred prior
to such termination.